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NEW YORK: US natural gas futures edged up about 1% on Thursday on a decline in output over the past few days and forecasts for higher demand over the next two weeks than previously expected.

That price increase came despite a federal report showing a slightly bigger-than-expected storage build last week that was still smaller than usual for this time of year because cold weather kept heating demand for the fuel high.

The US Energy Information Administration (EIA) said utilities added 78 billion cubic feet (bcf) of gas into storage during the week ended May 5.

That was a little higher than the 74-bcf build analysts forecast in a Reuters poll, and compared with an increase of 76 bcf in the same week last year and a five-year (2018-2022) average increase of 87 bcf.

Last week’s increase would boosted stockpiles to 2.141 trillion cubic feet (tcf), or 18.4% above the five-year average of 1.809 tcf for the time of year.

Front-month gas futures for June delivery on the New York Mercantile Exchange rose 2.5 cents, or 1.1%, to $2.216 per million British thermal units at 10:36 a.m. EDT (1436 GMT).

In the spot market, gas prices for Thursday at the Waha hub in the Permian Shale in West Texas returned to positive territory after falling into negative territory for Wednesday for the first time since October 2020.

Those negative prices came as pipeline maintenance prevented some fuel from leaving the basin and as mild weather kept demand for the fuel low for both heating or cooling.

Mild weather also caused power and gas prices to drop to their lowest in years in several other parts of the country.

In California, next-day gas for Thursday at the Southern California Border dropped to its lowest since July 2020. President Joe Biden’s administration, meanwhile, unveiled a sweeping plan to slash greenhouse gas emissions from the nation’s power industry on Thursday, one of the biggest steps so far in its effort to decarbonize the American economy to fight climate change.

Biden’s proposal would limit how much carbon dioxide power plants, which are the source of more than a quarter of US emissions, can emit into the atmosphere, putting the industry on a years-long course to install billions of dollars of new equipment or shut down.

Data provider Refinitiv said average gas output in the US Lower 48 states held at 101.4 billion cubic feet per day (bcfd) so far in May, matching the monthly record hit in April.

On a daily basis, however, output fell by 0.9 bcfd over the past few days to a preliminary three-week low of 100.8 bcfd on Thursday. The amount of gas flowing from Canada to the US was on track to rise to 7.9 bcfd on Thursday after dropping to a 25-month low of 6.7 bcfd on Sunday as wildfires in Alberta caused some producers to shut oil and gas output and pipeline flows. Since the start of the year, Canada has exported an average of 8.5 bcfd of gas to the United States.

With seasonally warmer weather coming, Refinitiv forecast US gas demand, including exports, would rise from 91.3 bcfd this week to 91.6 bcfd next week as some homes and businesses turn on their air conditioners. Those forecasts were higher than Refinitiv’s outlook on Wednesday.

Gas flows to the seven big US LNG export plants fell to an average of 13.1 bcfd so far in May, down from a record 14.0 bcfd in April. The decline was due mostly to reductions at Cameron LNG’s terminal in Louisiana and Cheniere Energy Inc’s facilities at Sabine Pass in Louisiana and Corpus Christi in Texas.

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